Homeowners’ Insurance Coverage

Brien Roche

Homeowners’ Insurance Coverage is a broad form of coverage. It provides coverage for your property. Also, it provides liability coverage in instances where you or a family member are sued for something that happens on your property or even for certain things that happen off your property. For instance, if your dog bites a neighbor, that would be covered.

There Are Four (4) Essential Types of Coverage:

1. The Structure

If your home is damaged by fire, hurricanes, hail, lightning, or other disasters listed in the policy, the insurance policy will cover that damage. It will also cover damage to structures that are not attached to the house but are on the property. For instance, this may be a garage.

2. Personal Belongings

If personal belongings in the house are stolen or destroyed by one of the events covered, then those personal belongings are covered. If there is some special personal property that you have in the house, for instance, a valuable ring, that should be covered by a special endorsement. Also, there may also be a need for property to be appraised. 

3. Homeowners’ Insurance Coverage-Liability Protection

This covers you in the event of a claim. The claim may be a result of somebody being injured on your property. It provides coverage where there is property damage that is caused by a member of your household. This coverage provides for defense costs. If you need to hire a lawyer to defend you from a lawsuit, the insurance company will pay for that lawyer. This coverage extends not only to things that happen on the property but may cover you for things that happen anywhere in the world. 

Most activities involving motor vehicles are excluded. There may be coverage for lawn or farm-type vehicles. In Erie v. Jones, 301 Va. 61 (2022), an ATV was found not to be a farm-type vehicle.

4. Additional Living Expenses

If your house burns down, then you may need alternative housing. If that happens, then the policy will cover that expense for some period of time. 

Events That May be Covered by Homeowners’ Insurance Coverage

You need to look closely at your policy to see exactly what types of events are covered under this policy. Typically they would include such things as fire, wind storm, lightning, hail, explosion and damage caused by a vehicle, theft, weight of ice or snow, sudden and accidental breakage of a water pipe, sudden and accidental damage caused by artificially generated electrical current.

Standard homeowners’ policies do not cover flooding, earthquakes, or poor maintenance. Flooding is covered under the National Flood Insurance Program. Earthquake coverage may be obtained through a special endorsement. Maintenance-related problems are simply the homeowner’s responsibility.

You need to look at your particular policy to see what types of events are covered. For instance, your policy may exclude wind damage.

When dealing with property coverage or liability coverage, you need to look at 14 V.A.C. 5-341-30 et seq. and also 14 V.A.C. 5-342-30 et seq. for definitions that are mandated and also for certain terms of coverage that may be mandated. See also Va. Code § 38.2-2105. 

Resident Relative Coverage

Depending on the wording of the policy, there may be coverage for a resident relative. This determination is much the same in regards to automobile coverage. Some cases dealing with the resident relative issue in the context of homeowners’ coverage are Hatcher v. Nationwide, 70 Va. Cir. 430 (2000) (Insured’s daughter was found not to be a member of the insured’s household); Griffin v. Allstate, 40 Va. Cir. 462 (1996) (No coverage under guest provision of policy since guest contemplates short-term stays.

Renters’ Coverage

If you rent the dwelling you live in, then you should have renters’ coverage. All of the events mentioned above may be covered under this policy. Also, it will provide liability coverage in the event you are sued.

Levels of Coverage for Damage to Your Home

The extent of coverage for damage to your home is going to be governed by the level of coverage. That level of coverage may be what is called “actual cash value” (ACV). ACV is the replacement cost minus depreciation. Depreciation is based on the age of the home.

Another level of coverage is replacement cost. This is the cost of rebuilding or repairing the home or replacing the possessions without any deduction or depreciation.

A third level of coverage is what is called “guaranteed or extended replacement cost”. This pays whatever it costs to rebuild the home as it was before the event. This coverage may actually exceed the policy limits. This provides protection against increases in construction cost.

Liability Protection

For most people, the most commonly used form of coverage is the liability coverage. This covers you in the event that a claim is made against you for some act occurring on the property or off the property. For this to be triggered, the event must relate to something that is not related to the use of one of your automobiles. Typically that would be covered by your auto policy.

This liability insurance does not pay you. If you are found to be liable, then the insurance company will pay the third party that has made a claim against you or a family member. For instance, if you accidentally harm someone while you’re off on vacation and it does not involve some business activity and does not occur in a car, then your liability policy will cover you.

Things that are not covered under the liability section are intentional acts. Likewise, any damage that occurs while driving is not covered. In addition, any business-related activities are not covered. Finally, such things as libel or slander are not covered.

Requests for the defendant’s coverage can be made per Code Section 8.01-417.01.

Dog Bites

When a dog has been found by a judge to be dangerous or vicious, then the owner is required to maintain liability coverage with at least $100,000 limits. Va. Code § 3.2-6540

Homeowners’ Insurance Coverage-Rate Hikes

If a liability claim is made against you, you can probably expect an increase in your premium. This is not a guarantee but a likelihood.

Medical Payments Coverage

As part of your homeowners’ coverage, there may also be medical payments coverage. This provides medical payments to persons other than household members who are injured on the property. 

Umbrella Coverage

An umbrella policy may also be called an “excess liability policy”. It supplements the basic liability policy.  It may provide excess coverage for auto, home, and renters insurance. Typically it only provides liability protection. This type of coverage may provide protection against slander or libel. This policy is supplemental to the underlying policy. Therefore that underlying policy must be in effect and must be at certain limits for the umbrella policy to kick in.

Umbrella coverage does not cover damage to your personal belongings. It won’t cover anything that is not included in your underlying liability coverage. If you have a pool in your backyard, there may be some logic in having umbrella coverage. If you have a trampoline in your yard, there may be some logic in having this coverage. This coverage overall is fairly cheap but it provides a great deal of additional protection. 

Umbrella policies typically do not contain UM/UIM coverage. If they do, it’s unclear as to whether Va. Code § 38.2-2206 applies. 

Notice

Typically with a homeowner’s policy, any violation of the notice requirement must be substantial and material. If so, the carrier does not need to prove prejudice. State Farm v. Walton, 244 Va. 498 (1992)  See also Dabney v. Augusta, 282 Va. 78 (2011); State Farm v. Douglas, 207 Va. 265 (1966)

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Call, or contact us for a free consult. For more info on homeowners’ insurance coverage see the Wikipedia pages. Also, see the post on this site dealing with liability insurance issues.